Wednesday, December 16, 2015

Will ethanol supply glut drains OPEC revenues?

What will OPEC do if it runs out of revenues from the huge sales of petroleum products in the open markets?

OPEC headquarters in Vienna, Austria
If this happens, the likely scenario is that OPEC, which is the second biggest supplier of petroleum products to the United States, will feel the harsh impacts of declining revenues from oil exports.

Alone, the United States imports about 3.24 million barrels of oil per day from OPEC, which accounts to 35 percent of the total gross imports in 2014, reveals by the U.S. Energy Information Administration.

The EIA adds that this volume is slight lower than what the United States buys from Canada, which is estimated at 3.39 million barrels of oil per day, or 37 percent of the gross total imports.

However, this scenario is slowly changing after the United States Congress enacted the 2007 Energy Independence and SecurityAct, which was intended to reduce the U.S. energy dependence from the Middle East after 9/11, says Bloomberg Businessweek.

As a result, the rapid fracking of oil from the shales has gained momentum thus allowing the United States to produce more oil that it needs to satisfy the rising demands of millions of consumers. This is not to mention the program that would allow the blending of a certain amount of ethanol into the fossil fuel to make the pump prices much cheaper and good for the environment as well.

But here is the twist to this development. On November 30, 2015, the Environmental Protection Agency (EPA) has mandated domestic oil refiners to blend only 18.1 billion gallons of ethanol into the nation's gasoline supply next year, adds Bloomberg Businessweek. But this figure was short by 4.1 billion gallons that was required under the 2007 Energy Independence and Security Act.

This also means that less ethanol on the gasoline will be advantageous to the economic interests of OPEC and other petroleum exporters to the U.S. Now, OPEC has the option to sell more oil at a price it wants to mark up.

Strange but true,  the American taxpayers had pumped tens of billions of dollars in subsidies and tax breaks into ethanol development since the 1980s. According to Businessweek, about 40 percent of U.S. corn goes into biofuels, which Americans paid an estimated $40 billion a year more at the grocery store.

As this developed, nobody knows if the U.S. Department of Energy, environmentalists and other consumer groups, are propping up the interests of big oil exporters to the detriment of public good?

Thursday, November 19, 2015

Saltwater-fed lamp: Will its inventor stick to her gun?

Engr. Aisa Mijeno meets with President Obama and Jack Ma of  Alibaba.com.
at the APEC CEO Summit in Manila. Photo: philnews.ph
Engr. Aisa Mijeno didn't have time to figure it out until she paid a visit to a remote village in Mt. Province in the Philippines.

At the touch of dusk, she had noticed that all the homes in that upland community were engulfed in total darkness. Then, she promised to herself that she would invent a lamp that wouldn't use kerosene, a common fuel for unsafe traditional lamps in the hinterland areas in the country. But kerosene lamps can burn down houses made of light and native materials that are readily available in the uplands.

When she went back home, Mijeno tried to polish her new invention. Voila, she made it. She thought her problem would end there. Instead, she was faced with the lack  of money to finance her new project, which is to mass-produce the saltwater-fed lamp intended for the homes in upland communities in the Philippines.

It took Mijeno a long while before she finally had a chance to meet one of the most powerful political figures the world over. But her luck wouldn't have been realized had  it not been for her persistence and determination to attend the APEC Summit in Manila held last November 2015 at the Philippine International Convention Center  (PICC). As she narrated to media, the security cordon almost made it impossible for her to get through the gates as she wasn't accredited by the APEC organizer. To  make the story short, President Obama's secret service agents fetched her at the gate and brought her to meet President Obama in person.

Such was the culmination of an exchange of camaraderie among President Obama, Jack Ma of  Alibaba.com and Engr. Aisa Mijeno at the stage for the world to see  and hear what she went through before she finally got that rare opportunity to meet the U.S. president. If I wasn't mistaken, Mijeno was invited by President Obama to visit Washington, D.C. And as media reports said even Mr. Jack Ma has expressed optimism to support the mass-production of the saltwater-fed lamp. In this way, the world's hinterland populations, especially those who are not connected to the power grids, may have the chance to be lit up at a cost they can afford to defray.

The Philippines comprises of more than 7,000 islands where lighting up all the homes would be next to impossible. Homes in coastal villages are accessible and can  easily be interconnected to the power grids. This is where the disparity in power distribution begins. But what about those homes located in the hinterlands, where infrastructures are absent? This is where this type of lamp  comes in. And to think that the Philippines is surrounded by the oceans is something that makes it more economical for poor households to readily avail of a cheap  power sources.

Now, the big question is: Will the inventor of this saltwater-fed lamp be strong enough to resist the tempting offers from foreign companies to buy her patent? The reason why I'm asking this question because there were Filipino inventions in the past which landed in the hands of foreign financiers, without the Filipinos or their intended  captive markets where they're supposed to improve the lives of the poor majority. There was a Filipino who invented a special gadget that could run vehicles using  water, instead of gas. Another Filipino invented the fluorescent bulb, but who is raking the huge profits?

Again, the Philippine government is to blame if this happens once more. From what I read, Mijeno failed to get support from the Philippine government even  after she came out with her invention. I wouldn't be surprised at all why Filipino inventors have been left alone for a long period of time. The Department of Science and  Technology (DOST) must spearhead a program that would lend support to our inventors. Otherwise, they'll have no option but to sell their inventions to foreigners who are expected to mass-produce them for huge profits.

Patent for the saltwater-generated lamp, which was invented by Filipino Engr. Aisa Mijeno, could be bought by a rich foreign financier. Then, it could be shelved for selfish reasons.  Possible buyers of this special lamp are oil producing countries and perhaps, companies that produce fluorescent and incandescent bulbs. Why?
If this newly invented lamp, which can also be used to recharge cellphones,  is mass-produced, using multi-million funds sourced out from from foreign financiers, there is likelihood that it could be vulnerable to tempting offers from people or companies whose intentions are either for profit or for something else. Nobody knows.

The concern of many Filipinos right now is whether the lamp's inventor is determined enough to stick to her gun or not? But sometimes, the color of money fools the eyes! Isn't it?

Tuesday, November 17, 2015

Islamic terrorists take advantage of refugees' mass exodus to Europe

A CCTV catches footage of a killing in Paris.
The discovery by French police of a foreign passport reportedly belonging to a Syrian reinforces notions that the suspects in Friday's killing of at least 120 people, including a CSU student, may have planned it prior to the mass exodus of refugees from Syria, Iraq and Libya.

What's my perception on this prior to the killing spree that took place the second time around in France is that the killings were properly planned. After the botched attempt by a lone gunman using an AK47 rifle aboard a train, which led to the suspect being toppled down by three American servicemen, the killing in Paris graced newspaper headlines, thus shocking the international communities.

According to an Los Angeles Times report (Nov. 15): "The document raised the possibility that Islamic State militants have made good on their threat to enter and attack Europe from within the wave of Syrian refugees."

If they (suspects) indeed had infiltrated and disguised themselves as refugees is something that other legit refugees may have missed to notice. Capitalizing on the movement of people has been a desperate strategy for Islamic militants to get perhaps get even with the recent killing of their comrades. To them, shooting innocent Europeans in a soccer game was a valid disregard for human lives.

Now, the problem lies with host countries in Europe to re-think of effective ways to screen or spot suspected Islamic militants from within the thousands of refugees who are swarming Europe like locusts.
But how? Screening each adult refugee prior to entry will be hard considering that most, if not all, the refugees have no passports to show at the border. If they have, the border guards have no way of knowing the details which could take up so much time to gather all the information on a single passport holder. Even if the idea of proper monitoring is employed by the authorities, it will be a tedious and time-consuming act knowing that transplanted refugees cannot be herded like goats into a fenced property.

On the contrary, putting each adult refugee a tracking device is possible but it will entail so much expenses for the host country. Or requiring them to report to the nearest police station on regular basis will be practical, too. But this won't be much of a help as this will be an added burden to the police duties.

Going back to where I left off, the matter of security at the soccer stadium was lax. In the first place, each soccer game patron enters the ticketing booth to buy or handover his ticket prior to entry. If they were suspected of bringing rifles in a bag or whatever, it could have been detected by the security or tellers manning the gates. Otherwise, the suspects may have bribed an insider to sneak the said rifles inside the stadium's premises? Upon entry, the suspects went to pick those rifles at an undisclosed location inside the stadium.

I was surprised that nobody had noticed the suspect coming out from the dungouts with rifles in hand? Unless they disguised themselves as stadium security guards or policemen, the soccer fans wouldn't have noticed their sinister moves inside. With thousands of people watching the game, nobody stood up to topple them down. Then, the carnage was done in about 15 minutes with 120 fatalities laying lifeless on the ground.

Wednesday, November 11, 2015

No more swivel chairs for world leaders attending APEC Summit in Manila

PH Pres. Benigno Aquino III inspects APEC venue. Photo: Malacanang
In one of its front page trivia, the Philippines News Agency came out with a news dispatch which states that the 21 world leaders who are set to attend the Asia-Pacific Economic Cooperation (APEC) Summit in Manila on November 17, 2015, would be using fixed chairs, instead of the normal swivel chairs that allow the leader to have the freedom to turn around whenever he wants to do so during formal sessions.

Admittedly, this news story is new. And this is the first time that a host country like the Philippines has used this new strategy to perhaps, curtail the bad mannerism of a particular world leader. To some, this might be misconstrued as an unacceptable imposition of something beyond human rational behavior. If it is, I simply don't agree with this view.

What is really the essence why the host country decides to deviate from using the usual swivel chair? In his words, Philippines' Communication Secretary Herminio Coloma, Jr. was quoted as saying: "They use fixed chairs to enable leaders to easily talk to those seated beside them. It keeps a leader from turning his back on
someone or talking behind the back of somebody else."

Coloma made the statement when he inspected the World Trade Center along Roxas Boulevard, which will be used as the working venue for international media representatives who are accredited to attend the 2015 APEC Summit in Manila next week.

Coloma added that sitting on fixed chairs indicates "openness" among heads of states.

Whoever initiated this rare idea, I can only wish that the world leaders will come to terms with reality.

I'm not new to attending a big international event such as the APEC Summit. If I wasn't mistaken, I attended one in Bali, Indonesia and, of course, the one held in Manila on November 25, 1996. I was supposed to attend another one in Vietnam but my name was eventually deleted due to internal politics in the bureau.

If I remember it right, the leaders adopted the Manila Action Plan for APEC (MAPA), which includes individual and collective action plans to achieve the Bogor goals of free and open trade and investment by 2010 and 2020.

At the same time, the Leaders meeting also endorsed the Information Technology Agreement which led to the conclusion of the agreement in the WTO.  "Leaders endorsed the focus of APEC's economic and technical cooperation activities into six areas: developing human capital, fostering safe and efficient capital markets, strengthening economic infrastructure, harnessing technologies of the future, promoting environmentally sustainable growth, and encouraging the growth of small and medium-sized enterprises."

Based on the above, I hadn't noticed any suggestion that would impinge on discussing the sensitive issue of the South China Sea, which is now causing so much brouhaha in Asia, if not the world. In fact, only six areas of economic and technical cooperation were included in the agenda. But why did the organizers miss to include such issue then? Was it because of its sensitivity? Or they just didn't want China to be infuriated so that they deliberately forgot about it?

Now, I wouldn't be surprised at all why China, which is participating in this week's Manila APEC Summit, couldn't be blamed as to what's transpiring in the South China Sea. Over the years, China always believed that it has the sole jurisdiction of almost all the islands, islets, reefs and atolls in the South China Sea, because nobody at that time came forward to sound the alarm.

Next week, China's leader President Xi Jinping has committed himself to attend the APEC Summit in Manila. Already, foreign affairs officials had appealed to the protestors not to lambast or insult the Chinese leader. In fact, a foreign affairs official said that it is not a welcome idea to hurl insults against China while its leader is attending the APEC summit. In short, the DFA official is calling on all Filipinos to show respect to all the leaders and delegates who were invited to see for themselves the hospitality  and beauty of the Philippines.







Monday, November 9, 2015

Cash vs debit card: Which is safer to use?

Whenever you go on shopping sprees, do you always carry so much cash to pay for the stuffs that you buy in the markets? Well, if that is your choice, so be it.

To most shoppers, this kind of practice is nothing new anymore. And it shouldn’t even raise your eyebrows whenever you see some people take out wads of money to pay for the goods that they buy.  They always believe that it doesn't only free them up with the worries of paying for  the increasing interests that their monthly bills could pile up. This, too, means to say that they'll have less to worry about because once they have paid those purchases with cash, they’re done.

Mind you, there are people who don't feel secured having wads of cash in their pockets for personal reasons. Instead, some of them prefer to use "plastic money" to buy things that they need.

While cash payments are good, using your debit card for your purchases is a much safer alternative. Aside from the convenience that it may give you, sometimes you can also reap hefty reward points from all purchases that you make, especially if the bank wanted to attract new customers in a particular branch.

Unlike the credit cards, which can easily be used by anybody, the debit cards have built-in security features which protect card holders from scammers and hackers alike. Although there are instances when card holders are victimized by fraud probably because of their carelessness, the use of  a debit card is something that every account holder should take into consideration.

In lieu of taking the time to withdraw cash from your deposit account, using the debit card is another best alternative for someone who is busy or in a hurry. From the stand point of a careful card holder, maximizing the use of the debit card seems to be a good idea and a portable way to buy things handy.

But what exactly is a debit card and what are its advantages?

The U.K.-based Money Advice Service has described a debit card as the first payment choice for people who don't like to pay on credit. It adds that any debit card holder can withdraw money from cash machines, and pay for purchases either online or by phone.

"When you pay with a debit card, the money comes directly out of your account. It’s basically the same as withdrawing cash on the spot and handing it over – but safer because there’s a bit of fraud protection and the card is easy to cancel if it’s lost or stolen," MAS said.

Like the credit card, you an swipe it, punch some buttons and put it back in your wallet. How tough can it be? Actually, experts say there are a handful of ways you can modify your debit card usage to make sure you're not wasting any of your hard-earned money on unnecessary fees or having your valuable dollars locked up by some companies.

According to Dana McDonald of StockMonkeys.com, a financial and investment site: “You don't create debt using debit cards and that's always smart if you have the money in your account. “

McDonald noted that banks are looking to boost profits by reducing the risks of using debit cards and offering new perks for consumers who are willing to switch, such as rewards programs. “And it's working. Debit cards today account for about half of all card transactions.”

However,  you also need to keep track of your card, she warned. “If your card gets stolen, a thief can empty your bank account in minutes. Thieves don't even need your card, as long as they have your name and card number.”

 Meanwhile, Linda Sherry, director of national priorities for watchdog group Consumer Action, shared some of her views to CreditCards.com.

She encouraged cardholders not to opt for overdraft protection, “especially if you know deep in your heart (be honest!) that you can sometimes be a little careless when it comes to money management. It can only take a few errant swipes to rack up some big fees.”

Sherry said that cardholders should be aware of what the banks are sending them. “Even though some banks are starting to cap the number of overdraft charges they'll zing you with over the course of a day or a week, it's still money coming out of your pocket,” she adds.

 “A better solution is to link the checking account connected to that debit card with a savings account or line of credit,” she explained.

Or, better still, write down your transactions in a check register or go online to check your account information, Sherry said.

While some people would like to withdraw money in person or use the teller machines, Sherry still prefers online banking as the best option. Likewise, she encouraged “every cardholder to have a good password (don't use "1111" or your birthday or your dog's name), and don't write it down anywhere -- this helps prevent the chance that someone might break into your account.” (By R.G. Altarejos)

Better future and security attract most refugees to Europe

Why do refugees from Syria, Iraq and Libya continue flocking to Europe? Considering the vastness of the Middle East, where some of the wealthiest countries are, it would be much more convenient for them to assimilate into Arab societies where they speak the same language and practice the same religion. 

Yet, they disregarded all this and moved out en masse to foreign shores where cultural traditions are different, if only to find safe havens for them and their families.

But streaming into Europe wasn't easy for them. Consequently, it had cost them so much sufferings such as battling with police and border guards just to get through where they're supposed to migrate. This is not to mention the brewing impacts of winter. After escaping horrendous violence in their home countries, where Islamic militants are sowing terror without letup, many refugees have sought refuge in several European countries.

 Brave enough to carry their dreams and determination to survive, at least, they have succeeded in breaking the barriers to the welcoming arms of the host countries like Austria and Germany, among the Euro-member countries that now provide sanctuary to these hapless migrants.

But the mass exodus isn't over yet. As days roll on, thousands more are coming to Hungary's border. With the latest government's decision to seal its border, many of these refugees, including children and women, have to find another route to get into the heart of Europe. This time, they landed in Croatia and Serbia, which eventually allowed them to take refuge as they try to map out their next, and perhaps, final destinations.

Although it is sad to know that not much of the refugees have been persuaded to seek refuge in the Gulf nations, where language is no barrier at all considering that they speak the same language. But only a few have decided to settle in the neighboring countries like Jordan and Lebanon.

Therefore, it is now easier to predict what they really wanted in the first place why they chose Europe as their ultimate destination? In Europe, their rights and future will be protected by the host government. As bonafide refugees, their children's future is assured, too. Far from violence and the chaos that now hound most parts of the Middle East like Syria, Libya and Iraq, where most of the refugees came from, they can settle in peace and harmony, without thinking that the Islamic militants will come to kill them, and worse, rape their women.

But the tide of refugees comes with repercussions, too. An article from the Bloomberg Businessweek  said: "Europe is torn between responses like those in Kos and Chios in Greece. The brutal receptions by Hungary and Bulgaria--and the heartbreaking photograph of a drowned Syrian boy on a Turkish beach--prompted displays of outrage.

And of course, pity from those who understand and feel how it is to become a refugee. Uprooted from their birthplaces, they have nothing else to depend on but their principles and culture that are now likely to be bruised by constant upheaval to survive.

Due to the massive problem that now threatens Europe, European Commission president Jean-Claude Juncker has called on his counterparts  to be sensitive to what is happening right now. In fact, according to Bloomberg Businessweek, he presented "a plan for member countries to take in a total of 120,000 asylum seekers, calling for mandatory quotas for each country and building on a proposal from last May to relocate 40,000 refugees and France 24,000 over the next two years."

So far, Germany has taken in an estimated 218,000 refugees, from a total of 4 million Syrians displaced by the on-going civil strife that rocks the Assad regime. Already, Egypt, Lebanon, Turkey and Jordan had taken in around two million refugees.

As the situation flares up, some migration experts have suggested that a "long-term solution will require the participation of Canada and the United States, which has taken only 1,500 refugees since 2011."

Juncher could be right when he insisted that the refugees are the results of the instability in some countries in the Middle East. "We are fighting against the Islamic State," he said. So it is only incumbent upon some of the European countries to accept people who ran away from that conflict,  he explained.

As European leaders and government officials discuss the mechanisms on how to address the issue at hand, the inclination for thousands more to move out from Libya, Syria and Iraq is growing. Surely, the negative impacts of the mass exodus of refugees to Europe and elsewhere will slowly be felt, especially in the labor sector, where employment opportunities will shrink. However, I strongly believed in the ingenuity of political bigwigs in Europe to calm down the storm that is brewing in the horizon. And surely, the mass exodus of refugees is expected to continue while political turmoil persists in some parts of the Middle East.

When time permits, they are always ready to create sets of mechanisms that will provide more opportunities for both the asylum-seekers and the citizens themselves for the sake of survival. (By Randolph Altarejos)






Friday, October 30, 2015

Will a court in outer space ready to intervene in PH-China territorial sea row?

It feels so insulting and demeaning that China continues to ignore the pronouncement of the Permanent Court on Arbitration based in The Hague that it has legal jurisdiction over the territorial row between the Philippines and China in the South China Sea.

An island reclaimed by China.

After reading the news reports, all that China could utter is that it doesn't recognize the arbitral tribunal's declaration concerning its right to hear the complaint filed by the Philippines against China. However, China hasn't mentioned any valid statement that would give any suggestion as to which international body or court should have the right to hear the case? Over and over again, China keeps on repeating like a broken record that it wouldn't abide by the tribunal's decision to recognize the merits of the case on the territorial disputes because it believes that the tribunal has no jurisdiction to hear such complaint.

China, for that matter, didn't even offer a suggestion that would UNCLOS  the right to hear the territorial tussle. Now, the question that lingers upon the minds of the curious public is: Which international court or body has the legal jurisdiction to hear the complaint filed by the Philippines against China? As far as I'm concerned, it would be impractical and absurd if an international court from outer space will hear such case? For me, it would be certainly be too expensive for litigants to go to Mars or other planets in the universe.

I'd would appreciate it if China can mention to the public the appropriate international body that has jurisdiction over the territorial row in the South China Sea. If China won't heed the call, it means that it's a political tactic that continues to make a real mockery of the issue at hand. And surely, it is only employing a delaying mechanism that would allow it further to install more illegal structures and military garrisons in some of the islands that are within the territorial waters of the West Philippine Sea, and other areas being claimed by other ASEAN-member countries.

What makes the South China Sea so important to foreign commercial ships plying the route to deliver their goods to importers? Freedom of navigation in the South China Sea has never been hampered for many decades. And free flow of goods in and out of this vast ocean has significantly enhanced international trade without experiencing any problem at all. If China is really serious at all that what it is doing right now, like building lighthouses, is to help guide international ships get safely to their routes, all it has to do is issue an timely pronouncement for the world to know in advance. But it hasn't done anything to pacify the doubts that linger in the minds of the public. Otherwise, China has other sinister motives to reclaim most parts of the South China Sea to its own advantage.

The world knows that China is a member of the United Nations. If this economic giant continues to behave like an ignored baby, perhaps, what the U.N. could do is to issue sanctions against China, if only to give the country some serious lessons to learn.

On the part of the Association of Southeast Asian Nations (ASEAN), all they could do is to boycott all Chinese-made products in the markets. Asean customs bureaus must make sure that no Chinese goods reach their ports. It is public knowledge that electronics and other telecommunications gadgets are made or assembled in China. And these gadgets end up in most markets of the developing world where it would be much easier for China to manipulate the needs for spare parts.

While the world awaits the real outcome of this controversy, China has already issued a warning that it is ready to face head-on any outsider meddling in its sovereignty.

Recently, the U.S. navy has sent some of its warships close to one of the disputed islands being reclaimed by China. Consequently, the move didn't bode well with China, which the latter considered a brazen act to ignite a war.







Wednesday, October 21, 2015

Two Chinese consular officials killed, consul general hurt in Cebu City shooting

A Chinese diplomat dies in a shooting in Cebu City. Photo: philstar.com
CEBU CITY, Oct. 21 (PNA) -- Two Chinese consular officials in Cebu were killed while the consul general was wounded in a shooting incident inside the Lighthouse Restaurant along General Maxilom, Cebu City at about 1:20 p.m. Wednesday.

A Chinese retired consular official and his spouse was taken into police custody immediately after the shooting.

The Police Regional Office (PRO) 7 identified the fatalities as Sun Shan, a male deputy consul, and Hui Li, a female finance officer of the Chinese consular office in Cebu.

Chinese Consul General Song Ronghua, who was also wounded in the shooting, is now undergoing treatment in a Cebu City private hospital.

Police said they have taken into custody as suspects in the shooting Li Qing Liang, 60, identified as a retired consular official and his wife, Gou Jing, 57.

Police also recovered one cal. 45 pistol Colt defender, three empty shells, two deformed slugs and one live ammunition from the crime scene.

Witnesses told police a group of persons were having lunch inside a function room in the popular native restaurant when three gunshots rang out.

The victims were rushed to a hospital in Cebu City, but the two consular officials were declared dead on arrival.

The police and the National Bureau of Investigation (NBI) 7 are still investigating the motive of the shooting. (PNA)

South China Sea oil and gas explorations: Will China honor its words?

High ranking government officials in the Philippines had batted out the idea of sealing an agreement with China to allow a room that will pave the way for an acceptable solution in the form of partnership to further explore oil and gas deposits in the disputed South China Sea territory.

A group of disputed islands now being claimed by China.
Photo: wikipedia
In an informal press briefing hosted by TV5 in Manila, Sen. Gregorio Honasan, now running as one of the six candidates vying for the post of vice president with the opposition's standard bearer Vice President Jejomar Binay, suggested that instead of going into war with China, the Philippines may opt to agree for a 30-70 business partnership in so far as royalties are concerned. China, considered highly equipped with mineral exploration technology, and had already established expansions by building permanent structures which had been misconstrued by political observers as a way to let the world know that it has the legal rights to re-establish its historical sovereignty over some of the islands and atolls in the area.

But this was objected by the Philippines, along with other Asean nations, considering that the Spratlys belonged to the West Philippine Sea by virtue of a legal provision of the United Nations on the Laws of the Seas (UNCLOS) that islands, reefs and atolls within the 200 nautical miles of a particular country must have jurisdiction with those areas. China, however, disputed this assertion by invoking historical significance for its claims of most parts of the South China Sea.

Honasan made the statement in light of questions that should he win the vice presidential post in the 2016 national elections he would prefer to be posted as the country's National Security Adviser than any other post in the government. It would be recalled that Honasan led a failed coup attempt against the administration of then President Corazon C. Aquino, which put his military career in jeopardy for many years. When he came out of the shadows, he ran as senator and won.

Talking about the sensitivity of the issues that hound the claims over some of the territories in the South China Sea is a very complex matter that concerns the United Nations in general  and the Association of Southeast Asian Nations (ASEAN)  in particular. In fact, the Philippines, being part of the ASEAN, has lodged a formal complaint with the Court of Arbitration in The Hague, The Netherlands,  a couple of months back, to further question the construction of military garrisons in some of the disputed islands in the South China Sea, especially in areas where freedom of navigation in the international seas could be hampered.

A disputed island where China built structures. Photo: flickr
Going back, what the lawmaker was hinting is that the Philippine government should re-think of a policy that will open up a path leading to a dialogue between the two countries in order to iron out the frameworks needed to talk on matters that are important to both countries.

As this developed, some political pundits have expressed doubts over China's sincerity on this issue. For instance, even after the Chinese leader had visited Washington, D.C. a couple of weeks ago, Chinese hackers had started poking and hacking on sensitive websties in the United States, to the consternation of some government officials. It wasn't the first time that Chinese hackers had done this. If I remember it correctly, Chinese hackers had also defaced some of the government websites in the Philippines many months back. What I'm saying is that Chinese officials maybe sporting those sweet smiles during official talks. But when they turn their backs, they night do the opposite.

Now, talking of oil and gas explorations in the South China Sea is not impossible to achieve. Already, China had hinted in the past that it is open to bilateral negotiations with the Philippines in so far as energy explorations in the SCS are concerned. How valid is China's sincerity in this aspect remains to be seen. Until both countries sit down together, away from the eyes of UNCLOS, to iron out the kinks of the relationships may be a welcome development.

However, this impending development is not without concerns. If the Philippines agrees to China's proposal to undergo joint explorations in the disputed territories in the SCS, one of the things that the Philippine representatives must do is to make sure that no provision in the agreement is violated. Being a developing country itself, whose technology is not a par with China's, proper monitoring on how oil and gas productions are siphoned off to offshore rigs remains a big problem.

In this joint endeavor, it is given that China will provide all the equipment necessary to undertake explorations in a vast area like the South China Sea. Meaning China will be spending more than what it could afford to find rich oil and gas deposits underneath these vast oceans. Therefore, it is only reasonable that China will get at least 70 percent of the production ratio. But in the thick of things, what is the guarantee that China will not, under any circumstances, deviate from the provisions of the accord? With all the modern facilities that it has, it would be very easy for China to just flick its fingers and make a magic out of the oil and gas productions that it is capable of doing.

I put these hang-ups in advance so that Philippine government officials may be forewarned on what China is thinking should it agrees to enter into an agreement with the Philippines and the rest of the claimant countries in Asean.





Tuesday, October 20, 2015

Shortage of rare earth minerals alarms high-tech companies worldwide

Rare earth minerals in powder form.
Just as big demands for rare earth elements (REES) soared by leaps and bounds over the years, the People’s Republic of China (PROC), which controls about 90 percent of the world’s supply, has slowly tightened its grip on the flow of supply into the open markets. Consequently, this put many high-tech companies worldwide wondering as to whether they could still meet their current production quotas or not?

What was the motive behind China’s move? Based on reports, China has stopped further explorations of these metals when it found out that some of its local miners were engaged in illegal mining activities. Consequently, the flow of raw materials to the open markets was affected, thus hindering many hi-tech companies to meet their production targets.

And no matter how optimistic they may seem, they felt that import demands may be hampered. Blame it on China’s self-imposed totalitarian rule to restrict the flow of rare earth metals to the international markets, which some mineral pundits observed, as another way to manipulate the prices of REEs to its own advantage.

Largely used as integral components of digital gadgets and electronics devices known to man, the chronic shortage has impacted on the ability of high-tech companies to keep up with the orders from international buyers. Already, one of the giant companies that is reeling from this rare earth’s shortage is General Electric, which uses terbium and europium for the manufacture of fluorescent bulbs. These bulbs, which are much cheaper and economical for household use, have been preferred by millions of consumers around the world.

While the United States accounts for most of the high tech companies today, it only holds about 13 percent of rare earth mineral deposits known to man. China, in fact, controls more than 90 percent of these rare earth production worldwide. And China is, now taking advantage of the situation by limiting the supply of its rare earth exports.

Ironically, the United States needs more rare earth elements that it can ever dream of. Unfortunately, it is largely dependent on China for these critical minerals, posing a serious threat to the American economy, says Ann Norman, et al, a senior research fellow, in her report “Critical Minerals: Rare Earths and the U.S. Economy,” published by the Washington, D.C.-based National Center for Policy Analysis (NCAP).

Molycorp's open-pit mining in California.
With few suppliers, disruptions in the Chinese rare earth market lead to price fluctuations, with ripple effects across rare earth-dependent industries. Notably, the United States has a considerable rare earths supply; what it lacks is an efficient permitting process to attract investments and promote extraction, Norman said.

In 2013 alone, rare earths shipments (the net selling value of products shipped from a mining or manufacturing business) totaled $795 million. However, the value of REs to the American economy is quite significant, due to their widespread use in many common products, she said.

While hi-tech companies are gasping for breath, the NCAP claimed that world demand for rare earths was estimated to reach 136,100 tons per year and this figure is expected to rise to 160,000 tons by 2016. Significantly, rare earth minerals are vital to the North American economy in general as end-market products and technologies, including oil refining processes and wind power, use rare earth elements to generate over $259 billion in revenues.

“These industries support 433,500 jobs and $27.2 billion in payroll. In total, rare earths support more than $298 billion in revenue from downstream economic activity, generating 535,000 American jobs and more than $33 billion in payrolls,” the NCAP research said.

With no assurance from where to get enough raw materials to keep their business running, many high-tech companies are forced to look at other alternative sources if only to keep up with their production quotas worldwide.

But no matter how optimistic they may seem, a paradise is not always bedecked with a bed of roses. A major question that played up in their minds was how come this problem cropped up only now when business has started to perk up?

Industry analysts have expressed worry that the impending instability is expected to create a situation that could possibly hurt the labor industry. When high-tech companies are unable to cope with market demands largely due to lack of raw materials, it is most likely that they will be left without any choice but to trim down operations, and may be forced to issue pink slips to thousands  of current workers who largely depend on hi-tech jobs as their only means of livelihood. But industry analysts have thought otherwise. 

They believed that the Chinese government's move to limit exports of REEs stemmed from its commitment to manipulate prices in the open markets. It is an accepted dictum that when the demand is high, the supply is low and vice versa. But what makes these minerals so valuable so that the world is badly in need of them?

Kathryn Free wrote at www.scienceline.org: “These metals are valuable because they each have distinctive — and rare — qualities. Neodymium and samarium, for example, are strong magnets, making them crucial for computer hard drives and headphones. Cerium is a powerful catalyst used as an additive to diesel fuel. Europium and terbium are needed for fluorescent light bulbs.”

As demands for rare earths rose, advanced countries have scrambled to get their share of rare earths, she said. The situation was aggravated when China reduced its rare earth exports by 70 percent in July 2010 onwards, a phenomenon that rattled some countries, she added.

 “Market instability is detrimental to manufacturers that depend upon a reliable supply of materials and can deter the introduction of new technologies,” says a study made by a group of researchers from the Massachusetts Institute of Technology (MIT).

According to the study, REEs are important because they provide critical functionality in a wide variety of applications. In fact, 17 of these rare earth elements are used in relatively large amounts in key technologies being developed to provide sustainable mobility and energy supply. Unfortunately, the availability of REEs appears to be at risk based on a number of factors.

The study further stated: “Another contributor to supply risk for REEs is the fact that they are co-mined; individual REEs are not mined separately. REEs are found together in geological deposits, rendering mining of individual elements economically inefficient.”

In today’s digital revolution, the importance of rare earth minerals cannot be discounted. Notably, they have become an indispensable part of the world’s technological advancement. As competition heats up among developed countries, the race to be on top of the technological game is of utmost important.

But will high-tech companies be able to keep up their technological race? That remains to be seen. In fact, the sensitivity of this issue has awaken the senses of some highly experienced technocrats who have expressed determination to further explore the possibility of processing rather than extracting REEs  from beneath the earth’s crust.

In March 2015, Dr. David Dreisinger, vice president and director of metallurgy for Search Minerals Inc., told InvestorIntel.com about his company’s plan to develop rare earth assets in Labrador, which would include neodymium, europium, terbium, dysprosium and yttrium.

“About 20 percent of our rare earths in our deposit are heavies, including the all-important dysprosium, which is very much in vogue in terms of the magnetic materials,” Dr. Dreisinger said.

As to the pending patent, he admitted: “We went through initial metallurgical development back in 2012 and did the classical upgrading to make a concentrate chemical treatment to extract the rare earths and made a rare earth — a mixed rare earth oxide as our final product and then realized that was probably too expensive to do all those different steps with our material.”

According to him, the direct extraction method, instead of crushing and grinding to very fine size our mineral, we basically just crush the material to a fairly coarse size, about 3 millimeters, and then we apply modest amounts of acid and heat that acid ore mixture to about 200 degrees Celsius, about the same temperature as cooking cookies in the oven at home.

While Search Minerals Inc. is into direct extraction method to produce more REEs underground, some companies have thought of venturing into recycling as a means to beef up production of raw materials.

For example, Molycorp, based in Greenwood Village, Colorado, and the world’s leading manufacturer of engineered rare earth products using advanced downstream facilities, has proudly stated in its website that this process allows the company to produce 13 different rare earth metals up to the purity level of 99.9999 percent. Unfortunately, Molycorp shut down its operation in California recently.

Why recycling in the first place? The company cited estimates that only one percent of all rare earth minerals are recycled today.  “That accounts for very little of what could be useful. In fact, most of the rare earths used in applications, such as fluorescent lighting and computer hard drives, can be recovered and reused.”

Molycorp has came up with the idea because it is convinced that the application of recycling method would cut the dependence of high-tech companies on foreign supplies of rare earth minerals, which are currently abundant in some parts of Asia.

The company said: “While recycling is a highly promising source of future material, the logistics and processes are complicated and will require greater consumer awareness and participation as well as extensive research and development.”

In fact, the company has challenged consumers  to recycle old electronics devices and fluorescent light bulbs. It even cited a 2009 report from the Environmental Protection Agency (EPA) which revealed that only 25 percent of consumer electronics were collected for recycling (38 percent of computers, 18 percent of televisions, and 8 percent of mobile phones).

The static depletion index of (reserves/present production) of rare earth is approximately 870 years. While copper, a key industrial metal, has a static depletion index of 34, the known reserves for rare earth are not expected to be constraining in the next 25 years, a study noted.(RG Altarejos)